NEW YORK (CNNMoney.com) -- The U.S. government must find a balance between supporting the economic recovery and reducing long-term budget deficits, White House economic advisor Lawrence Summers said Monday.
While the economy has resumed its growth and the possibility of a depression now seems remote, the government should continue its efforts to spur job growth and boost economic output, said Summers, who is director of the White House National Economic Council.
But the challenges posed by the nation's growing budget deficit "cannot be ignored," he added.
"The fiscal policy choices that the United States makes over the next several years will be as consequential as any we have made in a very long time," Summers said in a speech at Johns Hopkins University.
Summers said it was "essential" for the government to run deficits over the last few years as the economy fell into one of the deepest recessions on record.
He said the government's stimulus measures helped revive economic growth, though he acknowledged that many households are still struggling as unemployment hovers near 10%. As a result, he said it is crucial for the government to continue its efforts to support the economy in the near future.
"It would be an act of fiscal shortsightedness to break from the longstanding practice of extending these provisions at a moment when sustained economic recovery is so crucial to our medium-term fiscal prospects," he said.
Still, the government must take steps to ensure that the nation's budget deficit is sustainable over the long term, he added.
The U.S. budget deficit soared to $1.4 trillion last year and is expected to rise past $1.5 trillion this year, according to the Treasury Department.
Summers said much of that deficit will be reduced over the next five years as economic stimulus measures are phased out. He outlined a number of other steps to help bring down the deficit over time, including the Obama Administration's recently enacted health care reform bill.
Rutgers survey finds that the job market for long-term unemployed is still bleak. More
Big pocketed borrowers are paying lower average rates on jumbo loans and lenders are now requiring down payments of just 10% -- and, in some cases, waiving the mortgage insurance, too. More